Warning over merger plan for Waterford IT and IT Carlow in south east
‘There are significant risks to proceeding. As far as I can see, these have not yet been properly considered, and no mitigation is proposed’
‘Any merger is a chancy and costly business.’ Photograph: Getty Images
On July 27th, the Department of Education published a report from Michael Kelly, a well-respected public servant, on the proposed merger between Waterford IT and IT Carlow, to form a Technological University of the South East, or TUSE. It is intended that the two ITs will restart work on a merger by the end of August, with the aim of completing it, and applying to form the TUSE within three years. The more likely outcome is severe damage to higher education in the southeast for a generation.
There is no sensible argument against setting up a major higher education institution in the southeast. The likely benefits – to students, businesses, the economy and the whole region – have been well-described in many places, including the Kelly report. Realistically, the only way to do this is by merging WIT with somewhere else, and the only two credible candidates are IT Carlow and Cork IT. A CIT/WIT merger would be an obvious choice, but is not on the agenda. Therefore, the choice is between things as they are, with two good institutes of technology, or moving to a new technological university, based on their merger.
Any merger is a chancy and costly business. Many, both in the private and public sectors, fail. Failed mergers destroy value, because they consume management and staff time, which could have done something more useful; and because the new body can be seriously, or even fatally, weakened by the merger process. It is perfectly possible to merge two good profitable companies and end up with one bad, loss-making, company.
Public sector bodies don’t usually make a profit, but the delivery of their services can be damaged. The evidence is that, to succeed, a merger needs a clear, agreed, goal, and that both partners need to trust and respect each other. They also need to know each other very well (ie to have done a proper due diligence).
Kelly describes the attitudes of WIT and ITC to each other, and to the proposed merger: “there is little evidence of previous formal collaboration”, “many instances of negative commentary, formal and informal, have been unhelpful and hurtful”, “need to build mutual trust and respect as the foundation of equality of esteem”, “doubts about the real level of commitment to TUSE”. These should raise alarm.
WIT and ITC have also recently produced two separate visions for a technological university in the southeast, a further red flag. Kelly shows that there are many common elements in these visions, and I think he is right, but this is not a good place to start from.
The risks of proceeding are not well-covered in the report. There is a brief mention of the need for further resources, and more detail on the importance of achieving a common vision. It is proposed to finish in three years or less, which I believe to be unrealistic. The Dublin technological university process, which Kelly leads, and which has full support from all the ITs involved, has taken longer than this already.
I see further major risks in proceeding. First, neither IT is ready. They dislike each other, and do not trust each other. Much work is needed to bring the two organisations on board, and it may not be possible to do so. It is regrettable this has happened, but it would be worse to pretend it has not, or that it does not matter.
Basic to any merger is proper due diligence – that is, a thorough knowledge of the strengths and weaknesses of your partner. The two ITs have been unable, so far, to co-operate on due diligence, and cannot yet produce the common basic data to prepare a technological university application. As Kelly observes, no IT will agree to a merger without some assurance that they will be able to form a TU.
The price of moving ahead will be high. The direct costs of the merger will be, I think, a minimum of €4 million. There is also a big opportunity cost. Neither IT will have management time to develop themselves during the merger. They may not have the time, energy and resources to manage themselves properly.
There is a real risk of the merger dragging on for several years, with acrimony, suspicion and misery, and ultimately failing. This would do serious damage to the reputation of both ITs and the wider sector.
More importantly, it might lead to a real decline in the quality of teaching, business engagement, and research in the southeast, a decline which could take many years to reverse.
Unless the work is done now to repair the hurt, to restore a sense of trust, and to establish real mutual esteem, any attempted merger will be a shotgun wedding, with results better imagined than experienced.
Prof Anthony Staines is chair of health systems at the school of nursing and human sciences, DCU. He is also a member of the Higher Education Authority, but writes here in a personal capacity and his views do not represent those of the HEA